The Best Tech Stocks to Buy
These 12 undervalued technology stocks look attractive today.

Technology stocks offer investors the promise of growth in ways few other sectors can. After all, tech is synonymous with innovation, spawning new products, services, and features.
“Technology still ranks among the year’s best-performing equity Morningstar Categories, but a pause in the AI infrastructure rally cut into tech funds’ lead in the third quarter,” says Morningstar analyst Katherine Wu.
“Semiconductor stocks, the AI “winners” that propelled tech’s second-quarter gains, cooled, and software shares, the AI “losers” that had plunged earlier, rebounded. Still, software stocks closed out the quarter well ahead of semiconductors, rewarding some active managers and punishing others,” she adds.
In the year to date, the Morningstar US Technology Index rose 31.14%, while the Morningstar US Total Market Index gained 13.71%.
The 12 Best Tech Stocks to Buy Now
These were the most undervalued tech stocks that Morningstar’s analysts cover as of Oct. 2, 2026.
- Broadcom AVGO
- Fair Isaac FICO
- Broadridge BR
- Tyler Technologies TYL
- SAP SAP
- Sony Group SONY
- Bentley Systems BSY
- Nvidia NVDA
- NXP Semiconductors NXPI
- Autodesk ADSK
- Dassault Systemes DASTY
- Jack Henry & Associates JKHY
To come up with our list of the best tech stocks to buy now, we screened for:
- Technology stocks that are undervalued, as measured by our metric.price/fair value
- Stocks that earn a wide . We think companies with wide economic moat ratings can fight off competitors for at least 20 years.Morningstar Economic Moat Rating
- Stocks that earn a Low, Medium, High, or Very High , which captures the range of potential outcomes for a company’s fair value.Morningstar Uncertainty Rating
Here’s a little more about each of the best tech stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of Oct. 2, 2026.
Broadcom
- Morningstar Price/Fair Value: 0.55
- Morningstar Uncertainty Rating: High
- Morningstar Economic Moat Rating: Wide
- Industry: Semiconductors
Semiconductor company Broadcom is the most affordable stock on our list of the best tech stocks to buy. Broadcom is one of the largest semiconductor companies in the world and has also expanded into infrastructure software. The stock is trading 45% below our fair value estimate of $650 per share.
Broadcom is an amalgamation of high-value, differentiated and moaty chip and software businesses. Put simply, Broadcom is a prolific generator of cash flow. It is a terrific aggregator of firms, big and small. Its ability to acquire and streamline generates strong profits and cash flow and fuels robust shareholder returns. We laud the company for its execution and operating efficiency, which build upon its large organic investment and help it to outperform its end markets organically.
In our view, Broadcom’s networking and custom chip businesses are its strongest and the primary drivers of the company’s wide economic moat and results. We expect it to retain a dominant position in merchant silicon for switching and routing applications, where we see it as best-of-breed for high speeds. We also expect it to hold a formidable position in custom artificial intelligence accelerators as it benefits from hyperscale cloud vendors building chips to reduce their reliance on Nvidia. We see Broadcom as the key secondary AI compute vendor to Nvidia as hyperscalers further pursue custom silicon to gain performance, save money, and avoid vendor lock-in.
Outside of chips, Broadcom’s software businesses sell virtualization software, mainframe software, and cybersecurity software, and we see its offerings as highly competitive. Broadcom’s focus on strategic large software customers like financial institutions, governments, and large enterprises—where it is deeply embedded—elicits steep switching costs. We also see upselling opportunities with VMware under the firm’s belt.
We expect Broadcom to grow rapidly as a result of its skyrocketing AI chip business. We believe AI is already the primary driver of Broadcom’s results. To us, an investment in Broadcom today is an investment in its AI chip and networking businesses. Outside of AI, we see more moderate growth led by VMware and non-AI networking. We expect acquisitions to still be on Broadcom’s radar, but perhaps with larger, less frequent deals. After the 2023 VMware purchase, we expect the company to focus on deleveraging for a couple of years before tapping the acquisition market again.
William Kerwin, Morningstar senior analyst
Read more about Broadcom here.
Fair Isaac
- Morningstar Price/Fair Value: 0.58
- Morningstar Uncertainty Rating: High
- Morningstar Economic Moat Rating: Wide
- Industry: Software—Application
Founded in 1956, Fair Isaac is a leading applied analytics company. Fair Isaac is an affordable tech stock, trading at a 42% discount to our fair value estimate of $1,140 per share. The software application firm earns a wide economic moat rating.
Founded in 1956, Fair Isaac established itself as the industry leader in credit scores, which turned out to be a very lucrative business. Credit scores are used for more than just individual lending decisions; they are benchmarks used by investors, lenders, and the industry overall.
FICO scores account for about 60% of the firm’s revenue but over 80% of its profit. About 80% of scores revenue is business-to-business, whereby Fair Isaac sells its scores to lenders. Despite its industry-leading position, Fair Isaac seemed happy for many decades to keep scores pricing stable and generate higher revenue on higher volume. In 2018, Fair Isaac began revamping its pricing strategy and started to increase pricing on its scores. In addition to selling credit scores to lenders, FICO also generates about $220 million in annual revenue from its consumer offerings, where it sells credit scores directly to consumers and through partners such as Experian.
The underlying data for FICO scores is sourced from the three major US credit bureaus: Equifax, Experian, and TransUnion. As such, FICO scores are typically sold via these firms, but Fair Isaac has often had an adversarial relationship with the bureaus. In 2006, the credit bureaus launched a joint venture called VantageScore, but this has failed to displace FICO.
Fair Isaac’s mortgage business has been its largest profit driver with pricing per score at $10 in 2026 versus just $0.60 in 2022. In July 2025, the FHFA, announced “lender choice” which would allow VantageScore. This has shifted the scoring value proposition in the Fannie Mae and Freddie Mac channel to which score will produce a better result and introduces the possibility that FICO scores will only be pulled when VantageScore is unfavorable. We think over time, Fair Isaac will try to move to a performance pricing model rather than a per bureau per score model.
The firm’s software business is diversified across use cases in financial services. Retention rates and recurring revenue growth have been strong in recent years, which suggests to us that its software strategy is working.
Rajiv Bhatia, Morningstar analyst
Read more about Fair Isaac here.
3 Stocks to Sell and 3 Stocks to Buy for October 2026
Broadridge
- Morningstar Price/Fair Value: 0.63
- Morningstar Uncertainty Rating: Medium
- Morningstar Economic Moat Rating: Wide
- Industry: Information Technology Services
Next on our list of the best tech stocks to buy is Broadridge. Broadridge Financial Solutions, which spun off from Automatic Data Processing in 2007, is a leading provider of investor communication and technology-driven solutions to banks, broker/dealers, traditional and alternative-asset managers, wealth managers, and corporate issuers. The stock is trading at a 37% discount to our fair value estimate of $250 per share.
Broadridge Financial Solutions has been the dominant proxy and interim services provider for broker/dealers for more than 20 years. Its regulated proxy and interim business is its crown jewel, and a disproportionate amount of its net income comes from its fiscal third and fourth quarters during proxy season. Broadridge generates over 30% of its fee revenue and EBITDA from its global technology and operations segment, which provides securities processing solutions. Broadridge has benefited from higher engagement of retail investors through higher position growth and elevated trading volume.
Since its spinoff from Automatic Data Processing in 2007, Broadridge has streamlined its operations and expanded into adjacent markets. After years of losses in its clearing business, Broadridge sold it to Penson Worldwide in 2010. Expanding on its mailing, data security, and processing capabilities, Broadridge has completed over 30 acquisitions since 2010. Notable purchases include DST’s North American customer communications business for $410 million in 2016 and RPM Technologies for $300 million in 2019. The NACC business provides print and digital communication solutions, content management, postal optimization, and fulfillment to a variety of sectors, including financial services, utilities, and healthcare. RPM provides enterprise wealth-management software solutions and services. In 2021, Broadridge acquired Itiviti, a provider of order and execution management trading software and order routing, networking, and connectivity solutions, for $2.5 billion, which was pricey, in our view.
During its December 2023 investor day, Broadridge laid out three-year annual goals including recurring revenue growth of 7%-9% (organic 5%-8%), adjusted operating margin expansion of at least 50 basis points, and adjusted earnings per share growth of 8%-12%. These targets are similar to its prior three-year goals, which Broadridge largely achieved.
Rajiv Bhatia, Morningstar analyst
Read more about Broadridge here.
Tyler Technologies
- Morningstar Price/Fair Value: 0.65
- Morningstar Uncertainty Rating: High
- Morningstar Economic Moat Rating: Wide
- Industry: Software—Application
Tyler Technologies provides a full suite of software solutions and services that address the needs of cities, counties, schools, courts, and other local government entities. Trading 35% below our fair value estimate, Tyler Technologies has a wide moat rating. We think shares of this stock are worth $500 per share.
We view Tyler Technologies as the clear leader in a sleepy and underserved public service software niche market. We believe there is a decadelong runway for normalized top-line growth near 10% at Tyler, especially as demand for SaaS accelerates and the need to modernize local governments’ legacy enterprise resource planning systems intensifies.
The company’s three core products are Munis, which is the core ERP system, Odyssey, which is the court management system, and a web-enabled transactional platform. These systems enable normal operations of governmental units, including financial management, human resources, revenue management, tax billing, and asset management. Tyler addresses the needs of cities, counties, schools, courts, and other local government entities. Many existing core systems at customer sites are at least 20 years old and running on ancient software code, where there is no next wave of incoming, fluent programmers to keep these systems running. We think extending the life of these legacy systems is no longer tenable.
Tyler has also moved more meaningfully toward more transactional recurring revenue through several avenues. E-Filing for court documents and local village hall web portals for basic services like paying a water bill online have been the primary sources for these revenues over the last five years. Further, the April 2021 acquisition of NIC Inc., a leader in government solutions and payments, punctuated this move to more transactionally recurring revenue in our view.
Lastly, we see Tyler’s expanding portfolio as driving larger deals that encompass more solutions. While the company used to fight for every $100,000 deal, it has now established enough of a reputation in the government market that it is called upon in most relevant government system searches. The potential client base has certainly grown, as evidenced by a variety of statewide e-filing, transactional, and court system deals worth tens of millions of dollars annually. Further, Tyler benefits from a fragmented market with no companies of comparable size or scale focused on the local public institution market.
Dan Romanoff, Morningstar senior analyst
Read more about Tyler Technologies here.
SAP
- Morningstar Price/Fair Value: 0.69
- Morningstar Uncertainty Rating: Medium
- Morningstar Economic Moat Rating: Wide
- Industry: Software—Application
Founded in Germany in 1972 by former IBM employees, SAP is the world’s largest provider of enterprise application software. SAP is an affordable tech stock, trading at a 31% discount to our fair value estimate of $302 per share. The software application firm earns a wide moat rating.
SAP is the world’s largest provider of enterprise application software and global market leader in enterprise resource planning software. The company earns revenue by selling subscriptions for its various cloud-based software-as-a-service products as well as licenses and maintenance fees for on-premises software, which are now being largely phased out. Besides its core ERP products such as S/4HANA, SAP offers well-known back-office software products such as Concur for travel and expense management and Ariba for procurement.
The company was late to the cloud for ERP software but now offers two compelling products: RISE with SAP, which is the private-cloud edition designed for SAP’s large enterprise customers that are transitioning from their SAP on-premises ERP (ECC) to SAP S/4HANA; and GROW with SAP, which is the public cloud edition that is designed for midmarket companies with less complex requirements. We think GROW with SAP fills an important void in SAP’s product offering, as previously SAP’s ERP software was often unattractive to smaller customers given the implementation costs were just too high. With the launch of these new products, cloud revenue is growing swiftly, and SAP is capturing many new midmarket customers.
SAP is following a land and expand strategy, which is common in the enterprise software market. RISE with SAP and GROW with SAP are the land products, after which the company then upsells and cross-sells more SAP products to these customers, which is much easier in a cloud-based model. The company has yet to release its latest long-term ambitions but expects revenue growth to accelerate at least through 2027, along with rising margins as the cloud business reaches efficient scale.
Rob Hales, Morningstar senior analyst
Sony Group
- Morningstar Price/Fair Value: 0.70
- Morningstar Uncertainty Rating: Medium
- Morningstar Economic Moat Rating: Wide
- Industry: Consumer Electronics
Sony Group is a conglomerate with consumer electronics roots that not only designs, develops, produces, and sells electronic equipment and devices, but also engages in content businesses such as console and mobile games, music, and movies. Sony Group is an affordable tech stock, trading at a 30% discount to our fair value estimate of $34 per share. The consumer electronics firm earns a wide economic moat rating.
As technologies and consumer preferences change rapidly, it is generally difficult for consumer electronics companies to build an economic moat. The replacement cycle for digital appliances is usually four to six years, but as most products are commoditized, it is difficult for manufacturers to build an ecosystem that prevents customers from switching to other brands. As a result, Sony’s profitability in electronics has been unstable in the past, while its music, movies, and financial-services businesses have generated solid results.
Over the past decade, Sony has transformed its business model to enable more solid and stable growth by reducing the volatility of the consumer electronics business and by aggressively investing in acquiring content for its entertainment businesses such as music, movies, and games.
In the consumer electronics business, profits are generated from digital cameras and audio equipment, where Sony has strengths, while the TV business is thoroughly focused on avoiding losses by focusing on premium products and strictly managing inventories.
In the music and movie businesses, Sony has been able to seize growth opportunities, such as the expansion of the streaming market, by expanding its content and exploring new artists.
The image sensor business has the largest global market share. The majority of sales come from the mobile market, which benefits from the strong demand for improved image quality in smartphone cameras. However, unlike the entertainment businesses, image sensors require high capital investment and research and development, and with such high fixed costs, we believe the profitability of the business is not high enough.
PlayStation is Sony’s largest revenue-generating business. While user migration from PS4 to PS5 is progressing well, rising game development costs and competition from other platforms such as Steam are becoming a concern for the business.
Kazunori Ito, Morningstar director
Read more about Sony Group here.
Bentley Systems
- Morningstar Price/Fair Value: 0.75
- Morningstar Uncertainty Rating: Medium
- Morningstar Economic Moat Rating: Wide
- Industry: Software—Application
Bentley Systems is a software vendor catering to civil engineers, constructors, and geospatial professionals by enabling design, simulation, and data management of infrastructure assets such as roads and bridges. Trading 25% below our fair value estimate, Bentley Systems has an economic moat rating of wide. We think shares of this stock are worth $43 per share.
After successfully carving out a niche in computer-aided design with its construction-oriented software, MicroStation, Bentley Systems has been continuously expanding its family of offerings beyond the public works and utilities vertical to broaden its total addressable market. We find the opportunities in the resources sector attractive for Bentley Systems. With its 2021 acquisition of Seequent, Bentley now owns an industry-leading geotechnical tool that uncovers the complexities under the surface, a capability that many mining and energy companies are looking for. We think the proportion of revenue contributed by resource customers is on track to reach one-third of the company’s total over the next few years.
Digital twin is an attractive long-term growth opportunity for Bentley Systems. Bentley’s iTwin and Synchro products provide a digital context of infrastructure design, construction, and operations, which translates to stable income throughout the asset’s decades-long lifecycle. That said, it will take time for digital twin solutions to penetrate the infrastructure market, as it will be a long-term evolution in infrastructure engineering. We think Bentley’s leadership in digital twin solutions will gradually reflect in the company’s financials over the long term.
Bentley Systems has nearly completed its sales channel transformation, with over 90% of revenue coming from direct sales channels. Continued investment in its Virtuosity e-store creates a streamlined self-serve experience, significantly reducing the barrier for small and midsize businesses to procure Bentley products. This is especially important for Bentley Systems’ long-term growth as the company lands hundreds of new customers each quarter, most of which are smaller infrastructure contractors. The direct sales channel can also give Bentley Systems more insight into usage patterns, aligning future product development with user needs. High direct sales penetration and a large subscription revenue base are key factors supporting our forecast for Bentley Systems’ double-digit revenue growth over the next decade.
Luke Yang, Morningstar analyst
Read more about Bentley Systems here.
Nvidia
- Morningstar Price/Fair Value: 0.75
- Morningstar Uncertainty Rating: Very High
- Morningstar Economic Moat Rating: Wide
- Industry: Semiconductors
Nvidia is a leading developer of graphics processing units. Nvidia is an affordable tech stock, trading at a 25% discount to our fair value estimate of $310 per share. The semiconductor company earns a wide economic moat rating.
Nvidia has a wide economic moat, thanks to its market leadership in graphics processing units, hardware, software, and networking tools needed to enable the exponentially growing market around artificial intelligence. In the long run, we expect tech titans to strive to find second sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at Nvidia’s AI dominance.
Nvidia’s GPUs run parallel processing workloads, using many cores to efficiently process data at the same time. In contrast, central processing units, such as Intel’s processors for PCs and servers, or Apple’s processors for its Macs and iPhones, process the data of “0’s and 1’s” in a serial fashion. The wheelhouse of GPUs has been the gaming market, and Nvidia’s GPU graphics cards have long been considered best of breed.
More recently, parallel processing has emerged as a near-requirement to accelerate AI workloads. Nvidia took an early lead in AI GPU hardware, but more importantly, developed a proprietary software platform, Cuda, and these tools allow AI developers to build their models with Nvidia. We believe Nvidia not only has a hardware lead but also benefits from high customer switching costs around Cuda, making it unlikely for another chip designer to emerge as a leader in AI training. Nvidia’s expansion into networking has been impressive, allowing customers to cluster AI GPUs together for AI training.
We think Nvidia’s prospects will be tied to the AI market, for better or worse, for quite some time. We expect leading cloud vendors to continue to invest in in-house, while AMD is also working on GPUs and AI accelerators for the data center. However, we view Nvidia’s GPUs and Cuda as the industry leaders, and the firm’s massive valuation will hinge on the pace of AI buildouts in the years ahead.
Brian Colello, Morningstar senior analyst
NXP Semiconductors
- Morningstar Price/Fair Value: 0.79
- Morningstar Uncertainty Rating: High
- Morningstar Economic Moat Rating: Wide
- Industry: Semiconductors
NXP Semiconductors is a leading supplier of high-performance mixed-signal products. It earns a wide moat rating. The shares of its stock look 21% undervalued relative to our $310 fair value estimate.
NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, and mobile end markets through a combination of high customer switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade and beyond.
The merger of Freescale and the former NXP in 2015 led to a powerhouse in automotive semiconductors, which makes up more than half the company’s total revenue. Like many of its chipmaking peers, NXP is well-positioned to benefit from safer, greener, smarter cars in the years ahead. It is among the market leaders in automotive semis, especially in microcontroller units, which serve as the brains of a variety of electronic functions in a car. We’re optimistic about NXP’s development of products used in active safety systems, such as 77-gigahertz radar modules and battery management systems in upcoming electric vehicles.
Yet NXP’s prospects are also bright in its industrial and Internet of Things segment, thanks to its legacy strength in MCUs and embedded processors, along with its development of newer crossover MCUs that combine some of the benefits of each. Finally, NXP’s mobile wallet solutions should remain the industry’s gold standard and the backbone of mobile payment technologies offered by Apple, Google, and others.
Brian Colello, Morningstar senior analyst
Read more about NXP Semiconductors here.
Autodesk
- Morningstar Price/Fair Value: 0.79
- Morningstar Uncertainty Rating: Medium
- Morningstar Economic Moat Rating: Wide
- Industry: Software—Application
Founded in 1982, Autodesk is a multinational software company best known for pioneering computer-aided design with its AutoCAD product. The firm earns a wide economic moat rating, and the shares of its stock look 21% undervalued relative to our $268 fair value estimate.
Autodesk has continually innovated its product lineup and has become the industry standard for design software. The company’s latest innovation is centered around its three industry clouds—Forma, Fusion, and Flow—to provide an interconnected experience that accelerates the circulation of design ideas among different stakeholders. Underneath the industry clouds, Autodesk also has a platform services product that allows users to leverage data for customized solutions, unlocking additional productivity.
We think Autodesk’s next-generation industry cloud offerings are leading market solutions that should sufficiently address customers’ needs to digitalize their workflows. Fusion, the manufacturing cloud, should see faster adoption due to Autodesk’s midmarket focus in this category, but the adoption of Forma and Flow can take longer, as many customers are comfortable with their existing workflows built on Autodesk’s incumbent tools like Revit and Maya.
Besides product innovation, Autodesk also introduced major changes to its go-to-market model in recent years. The new Flex tokens provide occasional users with a more flexible option to access Autodesk software, allowing them to make payments based on the number of days needed. We think the token-based pricing model should incentivize more usage from lower-end customers and customers outside of core design functions. More importantly, tokens are a well-suited pricing scheme for Autodesk’s future AI functionalities, as pay-as-you-go options are often helpful in driving early user adoption. Together with the new transaction model, where Autodesk receives payment directly from customers, we foresee further evolution of the pricing scheme as Autodesk gains more insight into customers’ consumption habits.
We expect the addition of board members nominated by an activist investor to boost Autodesk’s operating efficiency and deliver tangible margin improvements. Sales channel reforms and layoffs are both initial steps toward a larger goal that supports our operating margin expansion forecast of approximately 800 basis points over the next five years.
Luke Yang, Morningstar analyst
Read more about Autodesk here.
Dassault Systèmes
- Morningstar Price/Fair Value: 0.79
- Morningstar Uncertainty Rating: Medium
- Morningstar Economic Moat Rating: Wide
- Industry: Software—Application
Dassault Systèmes is a leading provider of computer-assisted design and product lifecycle management software, serving customers like Boeing and Volkswagen throughout the production process. Trading 21% below our fair value estimate, Dassault has an economic moat rating of wide. We think shares of this stock are worth $29.30 per share.
Dassault Systèmes is the world leader in mechanical computer-aided design software. Its high-end CAD software, Catia, is the industry standard in automotive, aerospace, and industrial products, while its mainstream CAD software, SolidWorks, is the leading product in the small and midsize enterprises market. Besides CAD, Dassault also has leading positions in other related software categories like product lifecycle management and simulation for manufacturing industries. The company has established a strong presence in the life sciences software market with Medidata, the leading electronic data capture software for managing clinical trials. Dassault earns revenue by selling its software as a service in the cloud and on-premises with associated maintenance fees.
The company’s midterm strategy is based on two main drivers. First, expansion of customer breadth and depth on its 3Dexperience platform and in the cloud. Second, the adoption of its new 3D UNIV+RSES platform by industrial clients. This should accelerate the adoption of the 3Dexeprience platform and enable monetization of Generative Artificial Intelligence features. In addition, Dassault aims to create value through capital allocation. In industrial innovation, Dassault aims to expand into new domains and win new clients through industry-best practices. In life sciences, the company is expanding its offerings by combining patient data and study experiences with AI. In mainstream innovation, growth is expected to be driven by SolidWorks’ consolidation of a fragmented market.
Between 2024 and 2029, Dassault is targeting annual revenue growth of 7%-8% and expects to double its EPS to above EUR 2.20.
Rob Hales, Morningstar senior analyst
Read more about Dassault Systemes here.
Jack Henry & Associates
- Morningstar Price/Fair Value: 0.79
- Morningstar Uncertainty Rating: Medium
- Morningstar Economic Moat Rating: Wide
- Industry: Information Technology Services
Information technology services company Jack Henry & Associates rounds out our list of best tech stocks to buy. Jack Henry is a leading provider of core processing and complementary services, including electronic funds transfer, payment processing, and loan processing, for US banks and credit unions, with a focus on small and midsize banks. The stock is 21% undervalued relative to our fair value estimate of $180 per share.
Jack Henry remains committed to the idea that slow and steady wins the race. While larger peers built their leading positions in the bank technology space through a roll-up strategy and have since expanded their operations through mergers and acquisitions into areas outside of bank tech, Jack Henry historically built out its competitive position organically and remains focused on bank tech. We think this approach has allowed Jack Henry to develop a wide moat, and we think the company will continue to outperform its larger peers.
The company has not been without challenges. Jack Henry’s business is quite stable, with much of its revenue recurring under long-term contracts and related to essential services for banks and credit unions. Jack Henry’s revenue held basically flat following the financial crisis in 2008, which we believe was essentially a worst-case scenario for the industry from a macro perspective. However, the company’s near-term results can be influenced by bank M&A cycles due to the deconversion fees Jack Henry receives when bank clients are acquired by other banks. These fees fall almost entirely to the bottom line, and as such, can have an outsize impact on margins and profitability. Bank M&A has been muted recently, which has been a drag on results, although recent results suggest it is starting to recover.
Jack Henry has generally outperformed its larger peers in terms of growth, and we expect this to continue over time. We think the company’s focused set of platforms is a meaningful advantage that allows Jack Henry to pick up incremental share over time, although the high switching costs around its main core processing offering make this a very slow process.
Like other software companies, Jack Henry has recently faced questions about the potential for artificial intelligence to negatively affect its business. However, we see this as unlikely, given the mission-critical nature of its services for bank clients and the need for rock-solid security and reliability. Historically, banks have been extremely reluctant to change their core processing systems, and we think that will remain the case.
Brett Horn, Morningstar senior analyst
Read more about Jack Henry & Associates here.
How to Find More of the Best Tech Stocks to Buy
Investors who’d like to extend their search for top tech stocks can do the following:
- Review Morningstar’s comprehensive list of tech stocks to investigate further.
- Stay up to date on the tech sector’s performance, key earnings reports, and more with Morningstar’s tech sector page.
- Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
- Use the Morningstar Investor screener to build a shortlist of tech stocks to research and watch.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
